DSCSA blockchain project enters second phase

Phil Taylor, 21-Feb-2018

A project looking at the potential use of blockchain to establish security and trust between trading partners in the US medicines supply chain has reported its first findings.

The project – carried out by the recently-formed Center for Supply Chain Studies – is trying to establish the feasibility of incorporating blockchain into the Drug Supply Chain Security Act (DSCSA), which requires data to be generated on the movement of medicines from manufacturer to dispenser when it is fully implemented in 2023, and the ability to share that data with each other and authorised bodies.

Interoperable tracking is required at the package level, and existing advance shipping notices will likely be obsolete.

Bob Celeste, founder of the C4SCS and a former senior director at GS1 Healthcare, described the results of the latest phase of its blockchain project in a recent webinar hosted by TraceLink, and delivered a call to arms for companies to participate in the next phase of the project, which will include proof-of-concept pilots and a study looking at applying blockchain to the cold chain.

As a reminder, blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography and therefore resistant to modification of the data they contain – in fact the data is said to be immutable.

The chain is managed by a decentralized peer-to-peer network – in other words there is no central authority – and the encrypted data is shared and validated equally by all the nodes in the network. An infographic on how blockchain works is available here, focusing on its most common use at present as the technology underpinning cryptocurrencies such as Bitcoin, Ethereum and XRP.

“It’s a neutral utility providing access and retention of valuable data,” said Celeste in the webinar, pointing out that there are clear parallels between bitcoin and the transactions that might occur in DSCSA – for example identifying whether a drug is the right one in the expected place in the supply chain.

50 companies participated in the first-phase C4SCS’ blockchain study – including pharma manufacturers, wholesalers, dispensers, track and trace vendors, blockchain vendors plus regulators – which led to the creation of several simulations of ReferenceModels to see how blockchain could be used to share information pertinent to the DSCSA in practice.

The models will be out through their paces in the Phase 2 pilots with the aim of systematically arriving at a model that will be broadly adopted and trusted by all partners in the supply chain.

The blockchain project must address six key challenges if a blockchain system suitable for use within the DSCSA is to become a reality, said Celeste, including:

establishing a connection between non-adjacent trading partners;

establishing trust between trading partners;

sharing required data without inadvertently exposing proprietary information that could be used for example to detect inventory levels, shipment timings, business security issues, etc;

reducing the potential activity required of trading partners;

designing the system for expansion beyond DSCSA compliance; and (of course)

funding the architecture.

It’s a tall order that must take into account the complexity of the pharma supply chain, with a lot of actors and some taking on multiple roles, regardless of the complexity of the DSCSA requirements themselves.

Added to that, “we need broad adoption, the industry needs to align on what the governance of the data (what is stored and managed) and there has to be trust in the system,” said Celeste.

He discussed three ReferenceModels in the webinar, including two which rely on storing DSCSA transactions for interpretation later. The first ‘minimal’ model involves putting transaction data into the blockchain, a simple solution technically but which allows each supply chain partner to set their own rules about accessing it, raising the level of effort – and cost – in handling governance issues.

A second ‘discovery service’ model would not include DSCSA data in the blockchain, but instead use pointers to allow it to be retrieved from a repository. The latter is more technically complex, but simpler and more secure from a governance perspective with each supply chain party controlling their own data.

However, the primary drawback to both these approaches is a lack of ‘consensus’ which in blockchain terminology means that the distributed ledger operators agree on elements that can be added to the chain and who can access the data.

With that in mind the C4SCS project team looked at a third ReferenceModel – which focused not on storing transaction data itself, but on interpreting the transaction and storing the ‘conclusion’. In practice, that means EPCIS (Electronic Product Code Information Service) events like packing, shipping, receiving and unpacking of a product would not be stored but submitted to programming on the blockchain – known as a ‘smart contract’ – which will then evaluate the information and form a conclusion on what it means.

Smart contracts – which are also distributed and immutable – can be used to enforce data governance rules, but anyone registered on the blockchain can review and verify the programme’s behaviour.

The idea is to use couple DSCSA with EPCIS to achieve what C4SCS is calling ‘consensus determined findings’ which can be stored on the blockchain or – via a pointer – in a database. Using this approach the blockchain could note for example if a product has not been released into commerce yet or delivered to its final customer – and flag up for example if that material was stolen and subsequently offered for sale.

“Essentially, we switch our focus form the transactions themselves to what the transactions mean,” said Celeste. “Simulations suggest ReferenceModel three provides consensus – everyone is agreed on how they are calculated,” said Celeste.

The phase 2 pilots will be used to look more closely at the seven ReferenceModels to see how they operate in practice, how scalable they are and how costly they are likely to be to implement. C4SCS is holding meetings in the spring to demo the pilots.

“We gained incredibly valuable data and insight from the simulated Reference Models we developed in phase 1," said Celeste. "As an exploratory study, we experimented with the nuances of the supply chain, the DSCSA and blockchain to see how they may all fit together. The contribution of supply chain stakeholders and solution providers on the team created a rich environment that allowed us to test ideas and explore new ways to address drug traceability.”

“Based on the success of phase 1, it's time to take these findings out of the virtual environment and show the industry and regulators that they may indeed hold up under real-world conditions."